Description

In December 2012, Amir Peleg, founder and CEO of TaKaDu, reflected on how to position his young firm for the next fiscal year and beyond. The small Israeli startup had developed an innovative software system that used patented algorithms and statistical analysis to detect problems such as leaks, bursts, and faulty equipment within a water utility's infrastructure. Such problems caused significant water and energy loss at many utilities, led to service interruptions for consumers, and were only getting worse as the existing infrastructure aged. Since its founding in 2009, TaKaDu had attracted nine customers from around the world. However, as Peleg and his executive team debated how to allocate funding for the upcoming year, he needed to decide whether to focus on R&D to improve and add to TaKaDu's existing software and become the clear technology leader, or move ahead with its current offering and focus on getting new customers to penetrate the market as quickly as possible before competition intensified. Some in the company called for devoting the bulk of TaKaDu's resources to making the system more easily deployable, as deploying the TaKaDu service with a new customer could take up to two months. Peleg also wondered if the company should continue to pursue sales leads from anywhere in the world, or focus on one geographic market (and if so, what region should he choose)? An Australian water utility had made a public announcement it was accepting bids to implement a smart water network monitoring system and Peleg wanted to discuss if and how aggressively TaKaDu should bid on the contract with his management team. TaKaDu already had one Australian customer, was this the region to focus on?

Learning objective:

Understand the challenges of a company trying to scale and move beyond early adopters for its innovation. Examining how to segment potential business customers and determine who to target. Build an economic case for customers that care about ROI. Assess customer profitability.